The collapse of Dick Smith is being investigated by ASIC

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The corporate watchdog ASIC (Australian Securities and Investments Commission) has confirmed it is investigating the reasons behind the collapse of electronics retailer Dick Smith.

Commissioner Cathie Armour, speaking in response to questions at the ASIC annual forum, said: “I don’t know why Dick Smith failed. We haven’t heard finally from the administrators.”

However, she said it was a big step to link the collapse to a private equity transaction three years.

“We need to wait and see,” Armour said. “We can point to many successful businesses that have floated that were owned by private equity as well.”

Anchorage Capital Partners floated Dick Smith into a public sale of $520 million after an outlay of as little as $10 million cash.

There’s more at the Australian Financial Review here.

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